Tesla will launch its affordable Model 3 in the coming weeks, but according to some analysts, the launch of this new range of electric cars will be delayed. Worse, it will not be profitable, and quickly overtaken by its German competitors. Others disagree and predict that Tesla will become the greatest success in automotive history.
Bernstein Research analyst Max Warburton said Tesla is not a major player and disruptive to the traditional automotive industry, not least because the technology they offer is far from being exclusive. The fact that the Germans do not rush to catch up on the Model 3 potentially demonstrates that the success of this range will not be as incredible as might be expected. Moreover, if the German industries were to "copy" Tesla, the quality would be better.
These depreciating remarks by Max Warburton were published in a report facing a colleague who worked on the Tesla case: Toni Sacconaghi. This American analyst, also working at Bernstein and specializing in computer hardware and electric cars, believes that Tesla is a major player in the automotive industry and that it could influence its future. Especially because in the years to come, the electric car will be used by a lot of people. Tesla is expected to win numerous market shares with its Model 3 and simply its name, already renowned throughout the world.
Tesla will likely realize far more profits than traditional carmakers.
"Tesla has a unique growth profile and has significant value in light of its ambitions," said Toni Sacconaghi.
For the analyst, Tesla has paved the way for a new automotive sector - premium electric vehicles with high autonomy. But four years later, even holding 100% of this sector, the company continues to lose money.
"Tesla does not really disrupt the market. The company has not had a significant impact on the traditional automotive industry and is not innovating fast enough to put pressure on historical actors in the industry; They did not invent a product that really rivals traditional cars, "he said.
- The sector chosen by Tesla does not allow to make many profits
- Tesla does not have a clear battery technology or automatic driving. They will face tough competitors in Europe
- The Model 3 will fall behind and will not allow much profit, predicted the analyst.
Tesla continues to lose money and may need more than ever before, as equity prices continue to rise. In the first quarter, Tesla lost 17%, worth $ 330 million. By 2016, at the same time, their sales doubled for a profit of $ 2.7 billion. In March, Tesla raised just over $ 1 billion from its shareholders to finance the manufacturing of the Model 3, and is unlikely to be a single fact.
Model 3, whose prices were valued at around $ 35,000, will more than likely reach $ 45,000. Morgan Stanley recently predicted in a report that only 3,000 Model 3 will be delivered this year, up from 90,000 next year. That's half the forecast of three months ago.
Tesla said Model 3 production would reach an annual rate of 500,000 vehicles by 2017, and that the global production - Model S, Model X and Model 3 - which will reach 500,000 pieces by 2018, 2020. This target of 1 million would be achieved by the addition of a Model Y, a compact SUV, probably by the end of 2019, early 2020.
Morgan Stanley believes these forecasts are not achievable and that Tesla will only reach 500,000 orders on its Model 3 by 2024 at the earliest.
Investment firm Evercore ISI is more optimistic than Morgan Stanley. In a report, it said it would wait for 280,000 orders of Model 3 in 2018. Thus Tesla would reach its target of 500,000 vehicles by the end of 2019.
"Looking at Tesla's finances and the cost of doing business, I find it rather terrifying and I find it hard to understand Tesla's ambitions and what people expect of Tesla. I have a hard time understanding how electric vehicles present themselves as an attractive commercial activity, "added Max Warburton.
Max Warburton said traditional car companies were wondering why they should emulate Tesla, while most of the vehicles currently produced are selling for around $ 100,000, with gross margins of 20 to 25 percent ... German luxury cars achieve margins of 50%. According to him, Tesla is rather "irritating" than "disruptive".
If Model 3 achieves record sales, this will place considerable strain on an already wobbly industry, particularly in Great Britain.
"The sales and service network, at least in the UK, is already struggling to deal with the current models (Model S and Model X) because of all their problems. I do not know how Tesla will tackle the deployment of the Model 3, and not everyone I talked to at Tesla in Britain knows what to expect. Many of them even plan to leave before the launch of Model 3 because it is too stressful to work there. If the quality of Model 3 is as poor as that of these predecessors, after-sales service will be faced with major problems, "said Max Warburton.
The analyst has a Tesla, but did not specify which model.
"There are things I like about my Tesla, but it's hardly as good as a gasoline car. The battery life is limited, even with a battery of this size. The quality is mediocre and I think that given its price, it is not at all a good value for money. Yes, she's really pretty and everyone, but I do not think it's a single moment of smart investment. "
"Tesla takes a huge risk and positions himself on potential hubs. Guarantees for this, for that ... It scares me, "he concluded.
So, who is right ?
Professor Ferdinand Dudenhoeffer, director of the Automotive Research Center of the University of Duisberg-Essen, leans towards Tesla.
"I firmly believe that Tesla will be the greatest achievement in automotive history. Elon Musk (Tesla CEO) now defines the rules of the game, and all will have to follow him. Tesla's leadership in electric cars ensures dynamic growth, and the company is also ahead of recharging, batteries, modernization of retail. I am confident that Model 3 will be a success and that with the Model Y, in 5 to 7 years, Tesla will have annual sales of more than 1 million vehicles. "
Why is there no German rival in Model 3? Is it because car manufacturers do not see a market for a vehicle of this size?
" No. This is simply because they are long to relax. The bottom line is that the Germans are too late and slow to Elon Musk, "he said.